IVA / Mortgage Help Please

Ian2009

After many phone calls and debt advise from a reputable company, we decided to take out an IVA in January 2009.
We currently have a 136k mortgage with YBS fixed at 4.99 until Nov 2011. I'm a little a worried that when our fixed rate mortgage comes to an end in 2011 we could end up in back where we started due to high re-morgtage payments. Please could anyone help by giving some advise on the following questions:-

1. Can YBS demand full payment of the mortgage when our fixed deal ends due to the IVA in place ?

2. Knowing that we are on an IVA and trying to sort out our finances can YBS still put us on a potentionally high interest rate, been advised it could be as much as 7 - 9%

3. If i do not want to fix in to any rate can I assume I will go onto their standard variable rate when my fixed deal ends ?

Lastly when we finalised our IVA we had forgotton about a catalogue debt, we still pay the monthly payments and have not ordered anything since the IVA (neither is it our intention to do so) however we are a little concerned this is in breach of our IVA, should I stop paying them anyway and speak to the company dealing with our IVA ?

Appreciate any reply is only advise.

Charco_2

Q1. I suppose YBS could demand full repayment but it's unlikely, they'll have agreed to a 25 year mortgage with you and will probably want to earn the money from that as it runs it's full course!
Q2. Yes unfortunately, ironically especially because you are in an IVA they may put you on their high risk high rates! However...
Q3. It's likely that you will go onto their StandardVariableRate anyway and who knows what that will be then!

Lastly, Yes you stop paying your catalogue (its a preferential transaction), it should have gone into your IVA and still can - Contact your IPs firm and let them know!

The mortgage could cause you bother, but if your IP is worth their fee then it shouldn't be an insurmountable problem! It's probably something they should have dealt with already - although the interest rates would have been impossible to predict.

Anything could happen with your mortgage repayments. They will probably increase so your Disposable Income will fall so your affordable contribution to your IVA will be affected... If you are still able to offer a decent repayment then it may just be a matter of your IP calling for a variation to your proposal to reduce the dividend to your creditors - or explain that you'll pay for a year longer (6year IVA) to make up the difference etc etc... there are (or should be) still option!

One thing that could happen (when your mortgage fixed rate ends) is that instead of being on a capital repayment mortgage, you may be able to ask to be put on an Interest Only mortgage for two years (until your IVA ends) which would free up £100 or so you wouldn't really be affected that much (assuming you're on a capital repayment mortgage!)

gizmo111

What was the original agreement for your mortgage when the fixed rate ends?

Beetlebug1983

Is it very difficult to obtain a re-mortgage on a property whilst on an IVA?

I am in a similar situation as the OP, but my house is in the process of being renovated, with no bathroom / kitchen etc so no one would touch us anyway. But we are hoping to continue renovating. Our fixed rate ended in August. Our mortgage company wrote to us with a fixed payment for a period of 3 months as per the LIBOR rate, and this will be ending in Janaury 2010. Who knows what the rate will be then!!

Charco_2

It's not impossible or anything, your IP may be able to indicate to you which companies are more amenable than others... You'll probably find that the rates aren't going to be great though - however it'll be included as a legitimate expense in your IVA so you'll still only be expected to pay what you can afford! (provided the creditors agree)

SAGWALA_3

Hi OP, just to add my experience.

I too was in that situation in May this year. Mortgage fixed rate ending and in an IVA.

I am with The Woolwich (Barclays) and my rate went to what was agreed after the fixed term which was 0.9% above base.

For me that was a bonus, because the base was so low (0.5%.)

I would check the T&C's of your fixed rate and you will probably find it reverts to either something similar or your lenders base rate. (Presumably low!)

I would doubt, as was my experience, that your lender will do anything other than follow the original agreement and revert you to variable base.

I agree with Charco, and would not worry myself about high rates etc. I think you will be fine,and with the financial situation still in crisis (despite some peoples blinkered, short sighted ideas) I would expect the base rate to remain low for some time yet.

Hope this helps. Keep smiling, you'll be through the IVA in no time. Keep watching that light getting ever brighter.

Ian2009

Thanks for all your replies in such a short time, Every comment has been valuable.
I since checked our t&c's of the fixed rate mortgage and indeed as commented will revert to their standard variable rate